New year, new start: your January financial checklist

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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

Most New Year’s resolutions are lucky to last a week or two. But the cold, dark nights of January – when the social calendar is often pretty quiet – are a perfect time for getting your finances sorted.

Whether it’s spending 15 minutes searching a comparison site for a better deal, or finally ditching that subscription you don’t use, small money changes made this January could make you a bit richer in 2022.

So here are a few things that could help you save. And if you decide to put those savings in your investment account, you could really turn a little into a lot. By putting just £50 a month into an investment account that earns 5% returns a year, you’ll be sitting on almost £8,000 after 10 years, or nearly £21,000 after 20 years.

Task one: Ditch your unwanted subscriptions

Everyone has a free trial they signed up to that they forgot to cancel, or a subscription to something they no longer use. You can subscribe to everything from razors to dog food these days – so it’s no wonder most of us have lost track.

Take a look at one month of transactions in your bank account, and see what you’re paying for. And ask yourself whether you’re really using it. Citizens Advice estimates that the average person pays £640 a year in subscriptions they don’t need, which is a big potential saving.

Task two: Don’t auto-renew your phone bill

When your phone contract comes up for renewal, it’s tempting to automatically switch to the latest version of your phone and sign up to another pricey two-year contract. But if you don’t really need that new tech and your phone still has some life in it, you could keep your handset and switch to a SIM-only contract. It’ll usually be for only a fraction of the cost.

For example, on EE the latest iPhone 13 Pro Max with unlimited data will cost you £30 upfront and then £82 a month, for a total outlay of £1,998 over two years*. If, instead, you picked the same unlimited data plan on a SIM-only deal, you’d pay £35 a month – saving you £1,158 over two years.

*Costs from EE website, accurate to 07/01/22

Task three: Cancel your pricey TV package

People who’ve been with Sky or Virgin Media for years will have seen their costs creep up. If you’re wedded to keeping the service, though, try calling up to negotiate a new deal. It’s likely you’ll instantly save money – although a new deal will often mean signing up to a new contract for a year. You should also consider whether you’re using all the services and channels you’re paying for. It might be an idea to scale down your package.

Another option is to ditch the service altogether for a streaming option, like Netflix or Amazon Prime. The cheapest Netflix subscription is just £5.99 a month. Now TV is another option, as it has a lot of the programmes Sky offers, but you can buy a monthly pass and then turn it off when you no longer need it.

How much you’ll save will vary depending on how much you’re currently paying. But as an example, switching from an £80 a month Sky package to an £10 entertainment package on Now TV will save you £840 a year.

Task four: Sort your old pensions

This one won’t necessarily save you loads of money, but it’s a good time of year to get all your pension paperwork sorted. The Government estimates that people switch jobs 11 times during their life, which means most people will have lots of pension pots they’ve lost track of.

If you’ve lost track of a pot, your first port of call is finding any old paperwork for it. It should tell you where your pension is, how to log on to see its value, and whether you can transfer it. If you can’t find any documents, you can use the Government’s pension tracking service instead.

Tracking down these old pots makes sense for a number of reasons. Firstly, knowing how much you have saved in total will help you work out how much you might need to save in the future to enjoy the retirement you want.

Secondly, once you’ve located any old defined contribution pensions, you could consider combining them with your existing provider. This will make your pensions easier to monitor and manage. And you could also benefit from lower charges, greater investment choice and more flexibility when you come to access your pot.

Before you transfer any old pensions, just make sure you double check whether they have any guarantees attached, as you could lose them if you switch to a new provider.

Learn more about pensions

Task five: Don’t leave your cash earning nothing

Interest rates aren’t exactly inspiring at the moment, with inflation far above the rate you’re going to get on any savings account. BUT too many people are leaving their money sitting in their current account or an old savings account earning 0.01% interest.

The Bank of England increased interest rates in December 2021, which was a glimmer of good news for cash savers. The current top rate for an easy-access account is 0.7% from Allica Bank (using the Chip app) and Cynergy Bank. If you’ve got a smaller amount to save, you’ll get a much higher rate from Virgin Money, who’ll pay 2.02% on up to £1,000 of savings, and Nationwide, who’ll pay 2% on up to £1,500.

If you want to put away a little bit of money each month into a regular saver account, you can get much higher rates than a standard account. The top online accounts are from NatWest or RBS, both paying 3.04% on £50 a month. Or there’s Nationwide, who’ll pay 2% on up to £200 a month.

All rates based on MoneyFacts and accurate to 07/01/22.

Task six: Switch your bank account

Most of us are guilty of being far too loyal to our bank and not switching to a new one. But you can actually make a decent amount of money for minimal hassle by switching, because banks will pay you an incentive to move to them.

The best current offers are from HSBC*, who’ll pay you £150 to switch, and First Direct, who’ll pay £130. All these offers have some criteria attached, such as setting up direct debits or paying in a certain amount each month. So be sure to double check all the rules, as missing out on one could mean you miss the bonus.

*Based on MoneySaving Expert, accurate to 07/01/22

These articles are for information purposes only and are not a personal recommendation or advice.

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ajbell_laura_suter_MM's picture
Written by:
Laura Suter

Laura Suter is Personal Finance Analyst at AJ Bell. She is a multi-award winning former financial journalist, having specialised in investments. Laura joined AJ Bell from the Daily Telegraph, where she was investment editor. She has previously worked for adviser publications Money Marketing and Money Management, and has worked for an investment publication in New York. She has a degree in Journalism Studies from University of Sheffield.


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